The start of a new year is when many of us are making resolutions to improve our future, be it in our careers, relationships, health or wealth.
At Yahoo Finance, we think a holistic approach to good health and happiness includes being financially fit, which is why we’ve asked some money experts for their best advice to start 2022 with good change (the coin kind).
1. Ditch your financial baggage
That’s part one of a two-fold strategy from finfluencer and host of The Broke Generation Podcast Emma Edwards.
“Firstly, ditch any financial baggage you might be carrying from last year - payments you've been avoiding, that sneaky credit card balance that crept up, or that one buy now, pay later that slipped through the net," Edwards said.
"Get it squared off before heading into a new year.”
Don’t forget your emotional money baggage too, says Edwards.
This might be a wrongly denied pay rise, missing that promotion at work or loss of income from the past year of lockdowns and stay-at-home orders.
“Whatever you might be carrying, address it and take an active effort to ... let it go, ready for a fresh start," Edwards said.
"You can put this mindset shift to work, too, by using that pent-up energy and redistributing it into activities that actually improve your financial situation, rather than dwell on that baggage.”
Her second tip is to get crystal clear on your money intentions and goals for 2022 and avoid the trap of making a goal too lofty or arbitrary for your personal situation.
“Often, setting poorly thought through goals is setting yourself up for failure," Edwards said.
"Get clear on your current situation, think about how you'd like to improve that situation, and then set a plan of action - which involves a budget and an actual roadmap or manifesto of actions that allow you to stick to that budget.
"Starting the new year this way means you're not setting goals that are actually impossible to achieve to begin with. Plus, you're doing the critical part most people miss out when trying to improve their finances—you're actually looking at the actions and habits you need to uphold to achieve that goal."
2. Don’t be the 90 per cent who fail
Resolutions are often made on a whim and, without discipline, they can lose their momentum fast. That’s what coach and founder of The Kingmaker Carlo Chincarini tells Yahoo Finance.
“We said these big crazy things and then by the 6th of January, that's the date that I put my money on it where 90 per cent of people fail,” he said.
“I run 21-day challenges all the time and that's when people fail it because it loses the shiny thing. So what I get my clients to do is reflect on who they are now and who they want to become.”
Chincarini has his clients list five traits of their characters that no longer serve them to being successful, and importantly to replace them with five opposite traits to consciously and consistently replace them with the more positive traits.
“If you said to me, 'I want to get rid of self doubt, lack of confidence', I say 'cool'," he said.
"What's the opposite of doubt? Certainty. The moment that the clock ticks into 2022, you make a mental resolution and say, 'I don't have to be perfect with it, I expect to kind of fall back into my old patterns'. Because that's all it is, it's just a pattern.
"But every time that doubt comes up, we replace it consciously with certainty.
“It might not sound like the sexiest thing for new year's resolutions but when most people look back at who they are in 2021 compared to who they were in 2020, they're the same person.
"They just copy and paste the same results, year on year.”
3. Have a system and know your ‘why’
Accountant and business coach Stephanie Mellick from Iron Advisory says the new year is a time for reflecting on your business goals and drivers.
“Now is a good time to reflect on your current client base - both those that are your ideal clients and those that are a drain on the business and are unprofitable," Merllick said.
"It might be time to let some clients go, or raise their prices to reflect the time and effort of yours they take up.
“Make sure you have a system for the year ahead to nurture your clients and ask yourself, ‘which ones will you reach out to monthly, quarterly, on an ad hoc basis?’ This constant communication is critical to building long-lasting business relationships.”
Running a business is incredibly hard work and it’s easy to get lost in the day-to-day, so Mellick says all business owners (and really everyone) should take some time out to reflect on their ‘why’.
This might include asking why you are in your business and looking at whether your services or pricing model needs to change. Naturally, being an accountant, Mellick has some tax tips too.
“Now that we're half way through the financial year, check where your financial and tax position is sitting. Have you saved enough cash to pay for GST, PAYGW and any income tax due soon or at year end? If not, now is the time to put a plan in place and start saving,” she said.
“Reflect on the joy and energy your business has given you this year and how you feel about it in the year ahead. If something doesn't 'feel right', it probably isn't.
"Now's the ideal time to take some time on your own to see what changes need to be made. They may be small, they may be very large.”